IRELAND: There is precious little room for charity in the competitive business of fund-raising, writes Paul Cullen
All the main agencies run well-oiled fund-raising machines which are adept at maximising income from their target donors and reacting quickly to natural disasters and other catastrophes.
Sophisticated marketing techniques and the latest fund-raising methods are employed to generate a continuous stream of revenue, thereby ensuring that the agency is less reliant on once-off donations.
As in any other business, significant resources are invested in keeping tabs on competitors, courting positive publicity and seeking the endorsement of celebrities.
"There's a battle for market share and everyone is having to fight harder," commented one agency boss.
Individual charities may give the impression that they depend entirely on donations from the public, but in fact their reliance on individual contributions ranges from moderate to slight. For many agencies, the largest single contributor is the Government, and, for some, most of their income derives from governments, the EU and such sources. Goal, for example, had an income of €50 million last year, of which only €10 million came from public donations; most of the rest came in grants from governments and other institutional donors.
Meanwhile, about 39 per cent of Concern's income came from Government grants and other co-funders, compared to 48 per cent from public fund-raising.
Of the big agencies, Trócaire, with its access to Catholic Church fund-raising, such as Mass collections, is least reliant on Government contributions. Last year, its income was over €83 million; just €22.5 million of this came from co-financing by governments and the rest was raised from the public. (Trócaire's accounting year ends at the end of February and, hence, unlike the other two large agencies, includes the exceptionally heavy post-tsunami collection.)
Twenty years ago, the big agencies were almost as large as the entire Government overseas aid programme. Today, the balance has shifted, and Development Co-operation Ireland (DCI) is bigger than all the agencies combined: its budget this year of over €540 million is about five times the income of the largest development NGO, Concern.
"Most Irish people think about Concern and Goal when they think of aid, but this is misleading. In fact, the country itself - in our case, DCI - is the starting point for an aid effort," says Hans Zomer, director of Dochas, the umbrella body for development NGOs.
The exponential growth in DCI's budget means more money for everyone in the sector - from the aid agencies to the missionaries and individual consultants.
But it is not all good news; extra funding brings with it new challenges and dangers. Principally, there is the threat of over-reliance on state funding, and the loss of independence that can entail.
Currently, 26 per cent of the agencies' total income comes from the Government. This is low by European standards - in the UK, government funding accounts for 67 per cent of income, while in Holland the state gives €2.20 for every €1 raised by NGOs - but it may help to explain the historical vibrancy of Irish charities.
Even the missionary orders are becoming more reliant on the State for their funding: last year, DCI stumped up €12 million in block grants for the sector.
Zomer says that some agencies are in danger of relying exclusively on state funding: "We don't see this as a desirable situation. The objective should not be growth at all costs."
Trócaire, Concern and other agencies have voluntarily introduced limits on the amount of state funding they will accept; this is usually 50 per cent of overall income.
"It simply wouldn't be good for anyone to have NGOs providing the bulk of aid. We're simply one component in the mix," says Eamon Meehan, Trócaire's head of communications. "We're delighted the extra money is available from DCI, but we don't think it's feasible or reasonable to take too much."
This kind of caution reached its logical conclusion several months after the tsunami when both Concern and Trócaire told the public they had raised enough money and did not require any more.
That catastrophe provoked an unrivalled outpouring of generosity from the public, with dozens of private initiatives set up to channel the relief to the affected areas in Asia. Trócaire alone, for example, raised almost €30 million from its appeal.
But, as Meehan warns, "vast quantities of unexpected and unplanned money can be destructive" if not used carefully. Many in the aid sector express the view privately that at least some of the money was wasted on ill-planned, amateur projects begun by inexperienced though well-meaning volunteers.
The extraordinary response to the tsunami makes it impossible to gauge whether warnings of "donor fatigue" among the public are justified. A report by researchers in the National College of Ireland in 2000 found that while donations to charity were increasing, they were falling behind the general growth in our wealth.
Our cherished self-image of the Irish as a generous people may also be misplaced. The same NCI study also found that while a greater proportion of Irish people contributed to charity, average amounts were not high, and there was little evidence of large donors, as found in other countries.
"Philanthropy in Ireland at present appears to be more reactive rather than proactive," the authors commented.
Some of the methods charities have used to keep up income have proved controversial. First there was child sponsorship which, in its earliest manifestation, misled the donor into thinking that his or her money was being given to a single, specific and usually photogenic child in the developing world. This kind of fund-raising is still around today, but most agencies using it state that the funds raised will be used in the community in which the child lives.
The initial success of child sponsorship showed that it was possible to get large numbers of people to give on an ongoing basis. This kind of stability in income allows agencies to plan for longer-term involvement in development projects.
Then, in 1999, face-to-face fund-raising came to Ireland. Sightsavers International, a British charity with virtually no presence here hitherto, sent teams of enthusiastic young people out on to urban high streets seeking commitments from people to donate by means of direct debits from their bank accounts.
Concern was quick to follow suit and today at least 18 agencies use face-to-face fund-raising, more colloquially known as "chugging" (from "charity mugging"). Most use the services of professional fund-raising firms, although some, such as Concern and Amnesty International, keep the work "in house".
Chuggers generally earn €10-12 an hour and are set strict targets for recruiting new donors. Their smooth patter and occasional over-enthusiasm grates for many; but, in the words of one agency head, "the technique works and it is cost-effective".
Trócaire opted not to use face-to-face fund-raising. "We had worries about how it would be perceived by the public and we were also worried about possible attrition rates," says Meehan.
Watching from the sidelines, he admits that the results have been "impressive", adding: "There have been occasions when I felt we should have done it but, on the other hand, our income has increased anyway."
Beyond the big three of Concern, Trócaire and Goal (with income last year of €91 million, €83 million and €49.5 million), there are many other agencies with multi-million-euro annual incomes.
Some are indigenous agencies with rural roots, such as Bóthar and Self-Help International, while others are well-established Irish branches of foreign NGOs, such as Oxfam Ireland, Action Aid Ireland, Christian Aid Ireland and Plan Ireland. The Irish Red Cross and Unicef Ireland also raise money on behalf of their parent organisations.
While Dochas has 35 member-organisations, not all of which collect funds, about 6,500organisations are registered for charitable status with the Revenue Commissioners. Half of these are companies and are therefore subject to company law, but the rest are free to operate in a completely unregulated fashion.
Regulation of the charity sector was first mooted in 1990 by the Committee on Fund-Raising Activities for Charitable and Other Purposes. Two further reports, in 1996 and 2002, made similar recommendations, and the sector itself is demanding regulation.
In spite of this, and in spite of frequent promises by Government ministers, no progress has been made. There is still no central body for the regulation of charities in Ireland, nor a statutory provision for their registration and inspection. There is also no statutory definition of charity, charitable purpose, not-for-profit organisation or non-governmental organisation.
Tomorrow: Part 3 - How they spend the cash